A controversial example of private companies being allowed to provide NHS services has resulted in patients in pain being denied treatment, forced to go private and enduring "extended suffering".

Those are the findings of an internal NHS report into how patients fared when physiotherapy services in Rushcliffe, Nottinghamshire were opened up to "any willing provider" – a version of which will start affecting a range of NHS community and mental health services in England from Sunday.

The report is a secret internal "review" conducted by practice-based commissioner Principia Rushcliffe, a social enterprise that in 2009 used the Labour government's opening up of NHS community services to replace the NHS as the sole local provider of musculoskeletal services for people with neck and back pain with nine private providers. But a massive overspend in the planned £55,000 treatment budget in 2010 led to Principia last year bringing in drastic restrictions on patients' ability to access the care they needed.

Patients could not get physiotherapy services unless they had seen their GP twice, with the appointments at least six weeks apart. Even then, they could only see a physiotherapist a maximum of twice and could not receive any hands-on treatment. Patients were only guaranteed one session of "assessment, diagnosis and exercise prescription". For some people in pain that simply involved being shown how to do exercises or given sheets outlining postures that would best relieve their pain. Under Principia's cost-cutting measures patients were only to see a physiotherapist for a second time "if required".

The document, obtained under the Freedom of Information Act and passed to Society, admits that rationing caused "dissatisfaction and anger" among patients and cost the NHS more because some people whose conditions did not improve had to be treated in hospital and take drugs to manage their pain.

But the appendices to the report – detailing the views of local GPs, physiotherapists and patients – are more explicit. One unnamed GP's feedback stated: "Two sessions just isn't enough for anything. There are occasional patients who can benefit from two sessions, but almost all are coming back to us saying that they haven't had enough appointments. Waiting six weeks before being able to refer is no use for any acute injury, or indeed for those with acute significant back pain – with sciatica, for example. Some do go private after the NHS offered sessions, with the same physiotherapist. This system seems to be a retrograde step for physio. I understand that it was a cost-saving [measure], but our primary concern ought to be treating our patients better than this, surely."

Another doctor was equally blunt: "I was appalled when the physio sessions went down to two. Patients have been displeased with the two-session approach … I realise cost savings have to be made but to offer a half-hearted service is not the answer."

The policy has hit the least well-off the hardest, a third GP said. "A lot of patients are gaining some improvement with their two sessions of physio and feel they would benefit from further, but most of the time they feel unable to pay. Physiotherapists also ring us and ask if there is any way we can fund further sessions, as they feel they will be able to improve patients' symptoms given further sessions."

Some patients even needed hospital care because they did not get enough treatment to start with, the GP added, saying: "I have on a few occasions had to make another referral to secondary care, as a patient has not made the improvement we might have seen in the past with six or eight sessions of physio."

Negative effect

Unsurprisingly, patients' problems appeared to be aggravated by such minimalist care. One physiotherapist told Principia: "We are not providing patients with the appropriate treatment for their condition, which has had a negative effect on outcomes. Our outcomes data show that 41% of patients would respond favourably to more follow-up sessions. Another physio said: "Although some patients will have done well with their self-care programmes alone, there are many who really needed further treatment. Only a small proportion elected to continue privately. Most could not fund it. Utilise our clinical skills rather than tying our hands."

The report should be seen as a cautionary tale of the chaos that can ensue when NHS services are opened up to competition, warns the Chartered Society of Physiotherapy.

"What we see is that patients are being denied appropriate treatment purely on financial grounds. How can a physiotherapist be expected to treat a patient's condition without touching them? There is no published evidence to support that approach," says Phil Gray, the organisation's chief executive.

"This farcical situation is a direct consequence of opening NHS services to this form of open market competition when the health service is facing big financial challenges. This scheme is a disgrace, but we fear it is a taste of what is to come with the introduction of this form of competition across the NHS," he adds.

The coalition government has changed the term of "any willing provider" to "any qualified provider", but not its thrust. Primary care trusts in England have had to select three of eight services – including podiatry, back and neck pain services, talking therapies, and leg ulcer and wound healing – which from September at the latest they will have to allow non-NHS providers to deliver.

Critics see "any qualified provider" as the battering ram of impending privatisation, facilitated by health secretary Andrew Lansley's view that increasing competition as part of his NHS shake-up will drive down costs, extend patient choice and force providers to offer good quality care.

Race to the bottom

Gray, though, believes it will spark a race to the bottom in quality and that patients will be baffled rather than liberated by being able to choose between providers. "Any qualified provider is a deeply flawed way to deliver healthcare and the government simply has to recognise the dangers it poses for patient care," he says.

Simon Burns, NHS minister at the Department of Health, denies the Rushcliffe experience is any sort of portent of what is to come. "The Principia scheme was an entirely local initiative developed several years ago under the last government. It has nothing to do with our plans for modernising the NHS, or the national 'any qualified provider' initiative, which seeks to give patients the choice of who provides their treatment. It was certainly not a pilot for it. This local scheme is being re-used simplistically by those who oppose reform in an attempt to deny patients of choices they want," he says.

"We have always been clear that there is no excuse for imposing arbitrary restrictions that deny patients the treatment they clinically need. That's why our reforms give control to those who know their patients best: doctors and nurses in the NHS. We strengthened the health bill following the listening exercise to make clear that competition must only be used to benefit patients, never as an end in itself, and only where GPs, clinicians and experts deem it appropriate for their local communities.

"Unlike the Principia scheme, choice of any qualified provider will be based on quality standards developed with patient groups and clinicians, and fixed NHS tariffs so that there is no competition on price, only on quality of services," he adds.